Performance Management and Appraisal: Part Three - Training and Development

Chapter 9
Performance
Management
and Appraisal
Part Three | Training and Development
Copyright 2011 Pearson Education, Inc. PowerPoint Presentation by Charlie Cook

publishing as Prentice Hall The University of West Alabama
WHERE WE ARE NOW
Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall 92

LEARNING OUTCOMES
1. Define performance management and discuss how it
differs from performance appraisal.
2. Set effective performance appraisal standards.
3. Describe the appraisal process.
4. Develop, evaluate, and administer at least four
performance appraisal tools.
5. Explain and illustrate the problems to avoid in
appraising performance.
6. Discuss the pros and cons of using different raters to
appraise a persons performance.
7. Perform an effective appraisal interview.

Basic Concepts in
Performance
Management and Appraisal
Performance Performance
Appraisal Management
Setting work An integrated

standards, approach to
assessing ensuring that an
performance, and employees
providing feedback performance
to employees to supports and
motivate, correct, contributes to the
and continue their organizations
performance. strategic aims.

FIGURE 91
Online Faculty
Evaluation Form

Defining the Employees
Goals and Work Standards
Guidelines for
Effective
Goal Setting
Set Assign Assign Assign Encourage

SMART specific measurable challenging participatio
goals goals goals / doable n
goals

Setting SMART Goals
Specific, and clearly state the desired results.
Measurable in answering how much.
Attainable, and not too tough or too easy.
Relevant to whats to be achieved.
Timely in reflecting deadlines and milestones.

An Introduction to Appraising
Performance
Why Appraise Performance?
1 Is basis for pay and promotion decisions.
2 Plays an integral role in performance management.
3 Helps in correcting deficiencies and reinforcing good

performance.
4 Is useful in career planning.

(Un)Realistic Appraisals
Motivations for Soft Appraisals
The fear of having to hire and train someone new.
The unpleasant reaction of the appraisee.
An appraisal process thats not conducive to candor.
Hazards of Soft Appraisals

Employee loses the chance to improve before being discharged
or forced to change jobs.
Lawsuits arising from dismissals involving inaccurate
performance appraisals.

Performance Appraisal Roles
The Supervisors Role
Usually do the actual appraising
Must be familiar with basic

appraisal techniques
Must understand and avoid
problems that can cripple
appraisals
Must know how to conduct
appraisals fairly

Performance Appraisal Roles
(contd)
The HR Departments Role
Serves a policy-making and advisory role.
Provides advice and assistance regarding the appraisal

tool to use.
Trains supervisors to improve their appraisal skills.
Monitors the appraisal system effectiveness and

compliance with EEO laws.

Effectively Appraising Performance
Steps in Appraising
Performance
1 Defining the job and performance criteria
2 Appraising performance
3 Providing feedback session

Designing the Appraisal Tool
What to Measure?
Work output (quality and quantity)
Personal competencies
Goal (objective) achievement
How to Measure?
Generic dimensions
Actual job duties
Behavioral competencies

Performance Appraisal Methods
Appraisal Methodologies
1 Graphic rating scale 6 Narrative forms
2 Alternation ranking 7 Behaviorally anchored rating

scales (BARS)
3 Paired comparison 8 Management by objectives (MBO)
4 Forced distribution 9 Computerized and Web-based

performance appraisal
5 Critical incident 10 Merged methods

FIGURE 92
Sample Graphic
Rating Performance
Rating Form

FIGURE 93 One Item from an Appraisal Form Assessing Employee
Performance on Specific Job-Related Duties

FIGURE 94 Appraisal Form for Assessing Both Competencies and Specific Objectives

FIGURE 94 Appraisal Form for Assessing Both Competencies and Specific Objectives (contd)

FIGURE 95 Scale for Alternate Ranking of Appraisee

FIGURE 96 Ranking Employees by the Paired Comparison Method
Note: + means better than. - means worse than. For each chart, add up
the number of +s in each column to get the highest ranked employee.

TABLE 91 Examples of Critical Incidents for Assistant Plant Manager
Continuing Duties Targets Critical Incidents

Schedule production 90% utilization of Instituted new production
for plant personnel and machinery scheduling system; decreased
in plant; orders delivered late orders by 10% last month;
on time increased machine utilization in
plant by 20% last month
Supervise procurement Minimize inventory costs Let inventory storage costs rise
of raw materials and while keeping adequate 15% last month; over-ordered
on inventory control supplies on hand parts A and B by 20%; under-
ordered part C by 30%
Supervise machinery No shutdowns due Instituted new preventative

maintenance to faulty machinery maintenance system for plant;
prevented a machine breakdown
by discovering faulty part

FIGURE 97
Appraisal-Coaching
Worksheet

Behaviorally Anchored Rating Scale
(BARS)
Developing a BARS Advantages of BARS
1. Write critical incidents A more accurate gauge
2. Develop performance Clearer standards

dimensions Feedback
3. Reallocate incidents Independent dimensions
4. Scale the incidents Consistency
5. Develop a final
instrument

FIGURE 98
Example of a
Behaviorally
Anchored Rating
Scale for the
Dimension
Salesmanship Skills

Management by Objectives (MBO)
A comprehensive and formal organizationwide
goal-setting and appraisal program requiring:
1. Setting of organizations goals
2. Setting of departmental goals
3. Discussion of departmental goals
4. Defining expected results (setting individual goals)
5. Conducting periodic performance reviews
6. Providing performance feedback

Using MBO
Potential Problems with

MBO
Conflict with
Setting unclear Time-consuming
subordinates
objective appraisal process
over objectives

Computerized and Web-Based
Performance Appraisal Systems
Allow managers to keep notes on subordinates.
Notes can be merged with employee ratings.
Software generates written text to support appraisals.
Allows for employee self-monitoring and self-evaluation.
Electronic Performance Monitoring (EPM) Systems

Use computer network technology to allow managers access to
their employees computers and telephones.
Managers can monitor the employees rate, accuracy, and time
spent working online.

FIGURE 99
Online Performance
Appraisal Tool

Dealing with
Performance Appraisal
Problems
Potential Rating
Scale Appraisal
Problems
Unclear Halo Central Leniency or

Bias
standards effect tendency strictness

TABLE 92 A Graphic Rating Scale with Unclear Standards

Guidelines for Effective Appraisals
How to Avoid
Appraisal Problems
Get
Know the Use the Keep a Be
agreement
problems right tool diary fair
on a plan

TABLE 93 Important Advantages and Disadvantages of Appraisal Tools
Tool Advantages Disadvantages

Graphic rating scale Simple to use; provides a quantitative Standards may be unclear; halo
rating for each employee. effect, central tendency, leniency,
bias can also be problems.
BARS Provides behavioral anchors. BARS Difficult to develop.
is very accurate.
Alternation ranking Simple to use (but not as simple as Can cause disagreements among
graphic rating scales). Avoids central employees and may be unfair if all
tendency and other problems of rating employees are, in fact, excellent.
scales.
Forced distribution End up with a predetermined number Employees appraisal results
method or % of people in each group. depend on your choice of cutoff
points.
Critical incident Helps specify what is right and Difficult to rate or rank employees
method wrong about the employees relative to one another.
performance; forces supervisor to
evaluate subordinates on an ongoing
basis.
MBO Tied to jointly agreed-upon Time-consuming.

performance objectives.

Choosing the Right Appraisal Tool
Criteria for Choosing an

Appraisal Tool
Employee
Accessibility Ease-of-use Accuracy
acceptance

FIGURE 910 Selected Best Practices for Administering Fair Performance Appraisals
Base the performance review on duties and standards from a job analysis.
Try to base the performance review on observable job behaviors or objective
performance data.
Make it clear ahead of time what your performance expectations are.
Use a standardized performance review procedure for all employees.
Make sure whoever conducts the reviews has frequent opportunities to observe
the employees job performance.
Either use multiple raters or have the raters supervisor evaluate the appraisal
results.
Include an appeals mechanism.
Document the appraisal review process and results.
Discuss the appraisal results with the employee.
Let the employees know ahead of time how youre going to conduct the review and
use the results.
Let the employee provide input regarding your assessment of him or her.
Indicate what the employee needs to do to improve.
Thoroughly train the supervisors who will be doing the appraisals.
FIGURE 911 Guidelines for a Legally Defensible Appraisal
1. Preferably, conduct a job analysis to establish performance criteria and standards.

2. Communicate performance standards to employees and to those rating them, in writing.
3. When using graphic rating scales, avoid undefined abstract trait names (such as loyalty or
honesty).
4. Use subjective narratives as only one component of the appraisal.
5. Train supervisors to use the rating instrument properly.
6. Allow appraisers substantial daily contact with the employees theyre evaluating.
7. Using a single overall rating of performance is usually not acceptable to the courts.
8. When possible, have more than one appraiser, and conduct all such appraisals
independently.
9. One appraiser should never have absolute authority to determine a personnel action.
10. Give employees the opportunity to review and make comments, and have a formal appeals
process.
11. Document everything: Without exception, courts condemn informal performance evaluation
practices that eschew documentation.
12. Where appropriate, provide corrective guidance to assist poor performers in improving.

Who Should Do the Appraising?
Immediate
Self-rating
supervisor
Peers
Potential Subordinates
Appraisers
Rating 360-degree
committee feedback

The Appraisal Interview
SatisfactoryPromotable
SatisfactoryNot
Types of Promotable
Appraisal UnsatisfactoryCorrectable
Interviews
Unsatisfactory
Uncorrectable

FIGURE 912 Sample Employee Development Plan

Appraisal Interview Guidelines
Guidelines for
Conducting
an Interview
Talk in terms Encourage

Dont get Get
of objective the person to
personal agreement
work data talk

FIGURE 913
Checklist During
Appraisal Interview

Handling Defensive Responses
How to Handle a Defensive Subordinate
1 Recognize that defensive behavior is normal.
2 Never attack a persons defenses.
3 Postpone action.
4 Recognize your own limitations.

How to Deliver Criticism
How to Criticize a
Subordinate
1 Do it in a manner that lets the person maintain
his or her dignity and sense of worth.
2 Criticize in private, and do it constructively.
3 Give daily feedback so that the review has no

surprises.
4 Never say the person is always wrong.
5 Criticism should be objective and free of biases.

Formal Written Warnings
Purposes of a Written Warning
To shake your employee out of bad habits.
To help you defend your rating, both to your own boss and (if
needed) to the courts.
A Written Warning Should:

Identify standards by which employee is judged.
Make clear that employee was aware of the standard.
Specify deficiencies relative to the standard.
Indicate employees prior opportunity for correction.

Performance Management
Is the continuous process of identifying, measuring, and
developing the performance of individuals and teams and
aligning their performance with the organizations goals.
How Performance Management Differs From

Performance Appraisal
A continuous process for continuous improvement
A strong linkage of individual and team goals to strategic goals
A constant reevaluation and modification of work processes

Basic Building Blocks of
Ongoing
Direction Goal
performance
sharing alignment
monitoring
Coaching and Rewards,

Ongoing recognition,
development
feedback and
support
compensation

Why Performance Management?
Total Quality Management

The
Performance
Resolution of Appraisal Issues
Management
Approach
Strategic Goal Alignment

Using Information Technology to
Support Performance Management
Assign financial and nonfinancial goals to each teams
activities along the strategy map chain of activities
leading up to the companys overall strategic goals.
Inform all employees of their goals.
Use IT-supported tools like scorecard software and
digital dashboards to continuously monitor and assess
each teams and employees performance.
Take corrective action at once.

FIGURE 914 Performance Management Report

KEY TERMS
performance appraisal
graphic rating scale
alternation ranking method
paired comparison method
forced distribution method
critical incident method
behaviorally anchored rating scale (BARS)
electronic performance monitoring (EPM)
unclear standards
halo effect
central tendency
strictness/leniency
bias
appraisal interview
performance management
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted, in any form or by any
means, electronic, mechanical, photocopying, recording, or
otherwise, without the prior written permission of the publisher.
Printed in the United States of America.

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Chapter 9

Part Three | Training and Development

Copyright 2011 Pearson Education, Inc. PowerPoint Presentation by Charlie Cook

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall 92

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall 93

Setting work An integrated

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall 94

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Set Assign Assign Assign Encourage

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1 Is basis for pay and promotion decisions.

2 Plays an integral role in performance management.

3 Helps in correcting deficiencies and reinforcing good

Copyright 2011 Pearson Education, Inc. publishing as Prentice Hall 98

Hazards of Soft Appraisals

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Must be familiar with basic

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Provides advice and assistance regarding the appraisal

Monitors the appraisal system effectiveness and

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3 Providing feedback session

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1 Graphic rating scale 6 Narrative forms

2 Alternation ranking 7 Behaviorally anchored rating

4 Forced distribution 9 Computerized and Web-based

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Continuing Duties Targets Critical Incidents

Supervise machinery No shutdowns due Instituted new preventative

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2. Develop performance Clearer standards

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2. Setting of departmental goals

3. Discussion of departmental goals

4. Defining expected results (setting individual goals)

5. Conducting periodic performance reviews

6. Providing performance feedback

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Potential Problems with

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Electronic Performance Monitoring (EPM) Systems

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Unclear Halo Central Leniency or

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Tool Advantages Disadvantages

MBO Tied to jointly agreed-upon Time-consuming.

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Criteria for Choosing an

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1. Preferably, conduct a job analysis to establish performance criteria and standards.